tv Key Capitol Hill Hearings CSPAN August 12, 2014 12:00pm-2:01pm EDT
with the kurds. the headline this morning in "the wall street journal" is "iraqi leaders clashing over , limits the airstrikes hinder u.s. policy." what else is this administration considering usher and mark considering?ge -- caller: a range of options. the airstrikes have had a modest impact, but they certainly have not completely slowed the momentum of the islamic state. the administration has begun considering what else might be an option. at this point we have learned that the cia has begun at this point, we have learned that the cia has begun arming direct military aid to the kurds and small arms to the kurdish fighters. and the pentagon is considering
whether they might provide military aid as well. at this point the next steps are , the president certainly has difficult decisions to make about this winning the involvement of the united states or continuing on the course or pulling back. what we have seen is the u.s. involvement has had only a modest impact and has not changed the trajectory of what is happening. >> and just an update on that story, the president this and also hadriefed the prime minister of turkey.
and also, a discussion of a helicopter delivering aid in northern iraq that has crashed. the new york times reports on that crash that one of their journalists, their paris bureau chief, alissa rubin, was injured in that helicopter crash in iraq. here on c-span, we are live at the cato institute and they are holding a discussion this afternoon for a couple of cases making their way through the federal court challenging the subsidies in the affordable care act, in particular, the king cases that came up in the d.c. circuit and the fourth circuit respectively. live coverage on c-span. this should get under waste shortly -- underway shortly.
>> thank you so much for coming today. i am the director for congressional affairs at the cato institute. we are here today to talk about the next serious legal challenge to the affordable care act, otherwise known as obamacare. right after obamacare was there was theaw, debate over the constitutionality of the individual mandate. when the supreme court somewhat creatively upheld the constitutionality of the obama -- of the digital mandate, the obama administration went on something of a victory lap. the president himself said that obamacare was civil law and is here tuesday, but that may have been premature. and that is because what was
largely overlooked at the time was a provision of obamacare that said that in states where these exchanges were set up by the state itself, those were the only places where the employer mandate taxes to a certain extent -- and to a certain extent the individual taxes could be implemented. despite the text of the administration -- of the legislation, the obama administration went ahead and implemented these provisions in 36 states where the federal government excels created these exchanges -- the federal government itself created these exchanges. last month, federal court held the case that the administration violated the law by doing this, the fourthsame day circuit court said that the administration was acting in concert with the law. with respect to what we expect
to happen next, we have two people -- first, michael cannon, the director of the cato institute health all of the studies. before that, he served with the senate republican policy committee and holds a bachelors degree in american government from the university of virginia and masters degree in economics and law and economics from george mason. speaker froma their western reserve university school of law where he teaches environmental and constitutional law. prior to joining the faculty was onprofessor adler the u.s. to lick -- u.s. district of columbia circuit, and before that, he directed and environmental studies program. with that, i will turn it over to michael.
2014.ircuit on july 22, it is often known as the second highest court in the land, the d.c. circuit. this caseourt did in is that it ruled the president of the united states is violating the law, and not another small way. the patient protection and affordable care act of 2010, also known as obamacare or the aca, directs to establish health insurance -- the directs the state to establish health insurance exchanges. and if it does not, then it directs the federal government to establish an exchange within that state. it specifically authorizes the irs to issue subsidies to certain taxpayers who purchase health insurance "through an exchange established by the state" and though subsidies, because of their complicated and interrelated machinery of the ca, those subsidies directly
trigger penalties against the employers under the law, i the employer mandate, and against individual law as the individual mandate. ofpite the clear language the eligibility rules for the subsidies, in august, 2011, the by issued exchanges issued the federal government as well as those of tablet by the states . , ajanuary of 2013 development that surprised everyone, including me, 36 states, two thirds of the nation, had refused or otherwise failed to establish exchanges. and the federal government been established exchanges for those dates. in january of this year, 2014, the internal revenue service started issuing those subsidies not only in states that have established their own exchanges, but in those that had not. and thereby, began subjecting -- not only offering those subsidies to 5 million people in
those 36 states, but also began subjecting to the laws and individual and employer mandate tax to individuals and employers in those states. on july 22, the d.c. circuit ruled those subsidies are illegal. the court held this. the eligibility rules for those subsidies are clear that those subsidies are available only through an exchange established by the state. ca p --paca the pba establish within the state within which it operates and because though subsidies trigger penalties under the individual mandate, the fact that the obama administration is issuing those subsidies in 36 states where it had no authority means it is also giving the individual and employer mandate taxes broader effect than they would have if states were limited to
established exchanges. in effect, the court ruled that it is taxing and burrowing and spending tens of billions of dollars that no congress ever authorized. and that the president induce 5 million people to enroll in these exchanges by offering money he had no authority to tens of millions of individuals are statutorily exempt from those taxes. the court reached this decision with reluctance, but because it will likely have significant consequences for the individuals receiving tax credits through federal exchanges. and i'm mentioning tax credits and subsidies here interchangeably, because they're really just a myth that the rs makes to insurance companies. the court also said if that is a problem -- the really just payments that the irs makes to insurance companies. the court also said if that is a problem, it is one that can be fixed. the law was authored by judge thomas griffith, who the washington post described as widely respected by people in
both parties and has been regarded as a sober lawyer and with an open mind. and he received praise from dominant -- from predominant democrats, including barack obama who convert them to that post. how did we get to this place where the second highest court in the nation has ruled that the president is violating a law in a way that could not only affect the insurance divisions of millions of people, the tax liabilities of millions of people, the fate of his signature domestic achievement, but even elections? is tell theto do story of how we arrived here, how jonathan and i came to be working on this issue. when the ppaca became law in march of 2010, as john mentioned, what immediately took center stage where the challenges to the law's constitutionality. the state attorney general and others immediately began filing lawsuits to overturn the entire statute. there is another storyline that
was developing at the same time, but did not receive any attention. it began when the former department of justice official named tom christina noticed that the law authorizes subsidies only in exchanges established by the state, not through federal fallback exchanges. like every other feature of the law, this is almost totally overshadowed by the challenges of the individual mandate, the challenges to the laws medicaid mandate. christina mentioned in a 2010 presentation to the american enterprise institute. jonathan came across that in his research on the law. he mentioned it to me in an in august, 2011. it after the 2011 law was passed. at that point, we were still ruling on the constitutionality of the individual mandate. inwas later that month august, 2011, that the irs issued a regulation preparing to offer those subsidies through
federal exchanges as well. jonathan and i were aware that was exceeding the irs's authority and we immediately began talking to reporters. at the time, we thought that this was a drafting error. i think i speak for jonathan and i know i speak for myself. i thought this was a mistake that the authors of the law had inadvertently made. but as we researched this, because what this feature of the law does is allow states to veto major parts of the ppaca's regulatory scheme. the says these that it makes available in the exchanges, the employer mandate, and to a large extent, the individual mandate. i assume, as most people have, that this was a mistake. but as jonathan and i research this issue over the past three years, we realized something that came as a surprise to both of us, this was not a mistake. congressmen to do this. people who wrote the ppaca meant to do this. that is not to say that those in congress -- supporters of the
law do not like this provision now. and most of those who voted for this ill were probably unaware of it. here is the statute and legislative history. i will spend a lot of time on the statute. i expect jonathan will spend a little bit more time. as far as we know, no one has researched this issue as much as we have. far from being a typo, these provisions of the statute and limitations of the subsidies established by states are consistent and tightly worded. the eligibility rules for the subsidies refer solely to subsidies established by the state. they use that phrase explicitly twice and never deviate from that language. theeas in other parts of statute authorizing tax credits for small businesses who give their access -- their employees access through an exchange use that phrase, "an exchange." this provision of the law does distinguish between the two
consistently. the law also defined for those who are not sure what "state" means, the law include the definition. the defined to mean the 50 states, plus the district of columbia. we have an example of congress deeming a nonstate to be a state , and thereby authorizing the subsidies within that policy. statute says if a territory create such an exchange, shall be treated as a state. again, you have congress drawing an equivalence between something that is not a state and the state, so residents of that policy will be eligible for substitute. simply put, the entire statute is fully consistent with the requirement that taxpayers be enrolled in state established to receiven order the tax credits or subsidies that are available through the exchanges. andstatute is clear
consistent and unambiguous on this point. history, thetive most important thing to understand about this provision is how little legislative history there is. there are three interrelated reasons for this. republic'she new jonathan cohen told npr in january, 2010, exchanges got very little attention in the additional -- the initial debate over the flaw. and that is because "it is not a hot button issue" like abortion or public option. there were much more high-profile issues being debated. there is some talk about the difference between a house approach to exchanges, which would have had one nationwide exchange run by the federal government, and the senate approach, which would have had exchanges run by the state. but it did not receive the attention these others issues -- other issues received. the second reason is that it was unremarkable. offering subsidies to residents of states that in a programs and
withholding subsidies from those states that were uncooperative is something that congress does all the time. it does the exact same thing elsewhere in the ppaca when it threatens to revoke subsidies from state that did not implement the laws with medicaid expansion. a third reason is that with only rare exceptions that prove the rule, everyone in congress expected that all states would salish exchanges. woulds another reason -- establish exchanges. it is in the reason why this did not receive much attention. -- another reason why this did not receive much attention. these parts of the legislative history show that every conference of the health care bill advanced by senate democrats, including finally the withheld exchange subsidies from noncompliant state, even federal exchanges. it showed that the senate democrats added the restrictive language through exchanges established by the state to
their bill throughout the legislative process. it shows that at least some house democrats were aware of this feature and even complained about it before going on to vote for the ppaca and this line which anyway. in 2009, here is basically a -- of thehow legislative history as it relates to these provisions of the ppaca. in 2009, house democrats approved a bill that would have approved a single nationwide program and the subsidies would be available in the state-run exchanges as well. but with explicit language that the subsidies would be available in either type of exchange. the senate with a different story. to hold together all 60 democrats and overcome a republican filibuster, democrats had to concede to the demands of the likes of ben nelson and joe lieberman that exchanges were
run by states. that created another problem for the authors of the senate bill. that is, congress cannot implement state programs, but only create incentives to do so. healthey improve the care bill in september of 2009, it offered health insurance subsidies only in states that helped to implement that bill. it was held subsidies for four years in states that failed to establish exchanges and withheld permanently for states that failed that version of the mandate. amendments offered an that would have given new medicaid subsidies only two states that agreed to establish a republican version of the health insurance exchange. in october, 2009, the senate finance committee approved an offer to build subsidies "solely through the finances of the state." that is where this came from in
the senate finance committee bill. there were tax markups to consider state established exchanges. committee chairman and lead baucus,f the ppaca, max responded that tax credits are in the jurisdiction and that the purpose was to make the tax credits available. and that is how the senate finance committee was able to direct states to establish exchanges, by making that -- performance of that task a condition of residents receiving those tax credits. and senatesenators staff and white house staff convened in majority leader harry reid's office in late 2009 to merge these two committee approved bills, the health bill in the finance bill, together. this was in october, 2009, to create ppaca.
they not only retain the finance language to restrict subsidies to exchanges established by the states, but they also strengthen him and bush. they added another mention of the restrictive phrase to the subsidies and provisions. throughout the process, we have democrats inserting the language, saying that subsidies are available only through established exchanges. the finance bill also originally , when it cleared the finance committee, conditioned tax credits to small businesses on certain health insurance regulations, but the senate dropped that requirement from the ppaca, perhaps because it was redundant. the finance bill also conditioned its subsidies to individuals, which are the ones at issue in related cases, on states enacting the same insurance regulations. an individual subsidies created a much larger financial soentive for states to act,
there was not any need for them to condition those small business tax credits on those states taking the steps. after they had passed the ppaca in the wee hours of the morning on christmas eve in 2009, house democrats actually complained about this feature of the law. january, 20 10, 11 texas democrats wrote to president obama and house speaker nancy pelosi warning that the ppaca feature of the exchanges was likened to the state children's health insurance program, which operates similarly to the medicaid program. if the state is compliant, then they get total fun. if they don't, then their residence don't get any subsidies. -- their residents get no subsidies. children'sit to the health insurance program that -- in that unless they were
complying, the residents would not see any benefit and "millions of people would be left no better than before congress acted." veteran npr reporter julie ravner confirm how they interpreted these provisions. she wrote that because they oppose the health bill, they ,on't create an exchange leaving residents with no benefit of the improve law. time theye first appear to have taken seriously that states might refuse to comply to create exchanges. those who feared resistance warned of the dates ability to block bennett -- the states' ability to lock benefits.
after receiving a majority by electing scott brown in 2010, the ppaca became the only bill that could pass. house democrats, including the 11 members from texas i complained about the feature, and speaker pelosi, to whom the complaint, voted for the ppaca, including its provisions of exchanges established only by the state. this shows us what their intent was. fake give them one choice. you can either pass this bill and what is in this bill for better or for worse, or you can get no health care bill at all. ,hen they voted for the ppaca they voted for these provisions restricting tax credits, restricting subsidies to state established exchanges, revealing that was indeed their intent even if they didn't like that part of the bill very much. even though democratic senators and staffers have sworn up and down their intent was always to authorize subsidies through federal exchanges, that is not
what their actions show their intent was. and there was reportedly nothing -- i have found nothing in the legislative history that airs on this question. int no one has found anything in the legislative history showing or suggesting that members of congress voted intendedba ca -- ppaca that this law would issue subsidies through federal exchanges. they have had three years to come up with something, some contemporary statement -- contemporaneous statements of legislative history saying, this is what we intend we are putting the slot together. they have come up empty. is what record we have congress did. and what congress did is 180 degrees from from what the obama administration now claims congress wanted to do. statutet sketch of the in the legislative history, i will turn things over to john adler, who will talk about the cases. and then i will have some
concluding thoughts about the political policy and implications. thank you. >> inc., michael. it's a pleasure to be here -- thanks, michael. it's a pleasure to be here. let me say a little bit about how i got into this issue. one of the bigger focuses of my scholarship has been looking at the way the federal government seeks to induce state cooperation, or participation in various federal programs. it is a common feature of the environmental law that the federal government does not want to have to lament all of the key aspects of major regulatory programs like the clean air act or the clean water act. instead, they delegate that authority to the states. as michael our dimension, there is a problem. the federal government cannot tell the states what to do. the federal government can say them a you must enforce these limits -- cannot say, you must
enforce these limits in your state. the federal government must and find -- must find ways to encourage the behavior it wants. i have been asked to give a presentation at a health-care conference at the university of kansas in february, 2011, well before the case was before the supreme court. there was no rule on tax credits and exchanges, and nor litigation challenging those rules. i was asked to do a paper on the way the affordable care act try action.rage state in a presentation, i pointed out the language at issue in the current litigation today, the language that provides for tax credits and cost-sharing subsidies for the purpose of qualifying health insurance in exchanges established by the state under section 13.11. as someone who looked at that
for years, seeing a statute structured like this is not surprising. we see this in environmental law all the time. we see this in a case in which the supreme court looked at the sort of thing and one of the things the federal government was doing was providing differential tax treatment to private parties based on whether or not states in which those private entities operated in were complying with what the federal government wanted. everyone was using taxes on private parties as a way of trying to get states to thing the government to and. the government tune. from that perspective, there was nothing unusual here, nothing in the toolkit that the federal toernment uses to get states dissipate and help along. the other thing about -- to participate and help along. the other thing about this
scholars, folks working for various federal agencies, and not a single concern was raised that this was somehow an improbable or incorrectly written statute. no one thought it mattered. certainly, no one thought the supreme court would invalidate portions of the medicaid expansion, giving states more flexible and he to refuse to cooperate, and certainly no one refuse the states would to create their own exchanges. when the stakes were not very high, it was easy to say, well, this is a statute that congress wrote even if this is not whatever when congress would have wanted. but given the political events related to the election of scott brown and the loss of a single majority in the senate, it was this or nothing.
and so, that is what we got. it was only much later when states started to suggest that they might not create the exchanges and when the irs proposed this rule that this rather straightforward interpretation of what i think is plain and unambiguous statutory text became controversial. even the congressional research service when it was asked to look at this question said that a plaintext reading of the statute would suggest this is all that was authorized. crs knows what we teach in administrator law all the time, that agencies do not have inherent powers. they only have that authority which converts -- congress actually delegates to them. brs cannot issue a single tax irsit, let alone -- the cannot issue a single tax any on let alone issue others if congress has authorized it. and as the d c circuit has said for years, the failure to speak to this authority is not a
ailure of ambiguity, but failure of the authority to that agency. in d c circuit held that 1987 in a decision written by judge harry edwards, who dissented. the failure to speak to in agencies authority, the failure to delegate the authority to the agency is itself the absence of a delegation of authority. now we have these suits, these four suits. we have had two competing judgments in the u.s. court of appeals from the ec circuit and the u.s. court of appeals -- u.s. court for the third circuit. i want to go through the arguments that have been raised in these cases, and that are also being raised in the cases still pending before the district court in indiana and oklahoma. i want to say a tiny bit about what comes next. and then turn it back to michael. the central question in these cases is rather simple -- does
the affordable care act authorize the irs to provide tax credits, and as a consequence of tot cost-sharing subsidies the purchasing of insurance in states where changes were established by the federal government instead of the state? we know that congress never pursues its purpose to an incident -- infinite degree. congress always recognizes there are constraints of funds and political realities. instead, we look at what congress actually did. we look at 30 -- section 36 b in the internal code and we see that creditor authorized for insurance in these change by the state established under 1311. ec that it directs states -- and we can see that it directs states to lay out various
requirements for these state established exchanges, including the exchange once it is established must be a nonprofit. as michael already mentioned, the statute defines one of the state to be district of columbia. where of the things congress can actually do, define a state in the statute. and that is what it did. we look at section 1321, which is where the authority for the federal government comes from department of human services shall establish, using that same phrase, "shall to ensure that the exchange operates in the same way. that provision, the government has argued, and as the d c circuit has pointed out, it may make them a 1321 exchanges of a
1311 exchange. it may make them an equivalent, but it is still established by the department of human services. both employment which and in actuality -- both in plain language and in actuality, it is not an exchange established by the state. the way congress refers to exchanges, sometimes this is exchange and sometimes it says as established by the statute, and other times an exchange established by the state. congress could have said exchange everywhere. and if so, brs would have a lot of flex ability. that is not what congress did. congress added qualifiers that limited and help define what is being referenced throughout the statute. and as it turns out, the irs never actually engaged this inquiry when it looked at the statute, but it turns out when we seeks at the state,
that in every place it appears, it is a provision that either serves to provide an incentive for state cooperation, or help facilitate cooperation between state exchanges and, for example, other entities like medicare and medicaid and the like. congress uses different terms in different places and there is a pattern to his language. theften refer to this as chevron two-step. it is a two-step inquiry. did congress speak to the precise question at issue? if so, that ends the matter and "gives effect" to what congress did. we look at the statute and other objective indicators of statutory meaning. whether congress answered this question. we don't have to see what the agency thinks. the courts are very clear on this point.
the laws that congress enacted in the administered procedures act was that the courts answer questions of law, not agencies. the court looks at the statute to see if this particular question -- our tax credit authorized in federal exchanges -- is answered by congress. if so, we go no further. and the court has a clear -- has been clear that the d c circuit has not been very clear over the years. this isn't a game where the agency gets to say, let's see if we hold the statute a particular way or decide to interpret words in other ways, can we find ambiguity? that is not the way we do it. legislators and constituents should be able to read a statute in have some sense of what it means. maybe that is a herculean butmption in some contexts, in a lot of statutory context,
that is somewhat difficult. we understand that states are risking all of their medicaid money the way the statute is written. required is actually looking across references and satisfying various provisions. if you did not know what those were, you would not want no -- you would not know what they requirements were. here, billing which is very clear. very clear.age is anyone who looked at this could have seen that it is exchanges established by the state. and if they were curious, they could look up the definition of state in this statute. this is not a skier or hard to understand. -- not obscure or hard to understand. the other thing to understand in this is that complexity does not me ambiguity. ambiguity really means there is inability toable determine the precise meaning of the statute or the scope of the statutory term.
but it is not just because congress is doing something difficult or, located that it is ambiguous. it just means that the court is reviewing the statute and the agencies within the statute have to take their time and make sure they focus on what the statute actually says. thing aboutportant chevron that is important to remember is that it has not gotten a lot of attention in how they reached the sent in the -- the dissent in the court opinion. sure thatmust also be ambiguity is a -- is evidence of delegation of authority to an agency. ambiguity in and of itself in a vacuum is not enough. because the chevron doctrine is based on the premise that when ,ongress is not fully detailed it has handed off authority to the agency. it has delegated the authority
to the agency to use its expertise to fill in the gaps. precisely.t more and moreover, for the agency to exercise that authority, it is still supposed to explain why it is doing what it is doing, why it is breaching the statutory interpretation that it is imposing. and here, one goes to the federal register when the irs finalizes its rule and one find a conclusory paragraph that they say is consistent with the purpose and we cannot find anything that is not. opinionvery d c circuit that has come out in the past 25 years -- my wife says i'm a bit of a dork and i enjoy reading that sort of thing. it's hard to find any decision that would the something like that, to approach the decision making. when the epa decides it's going to regulate greenhouse gas emissions, it prepares a
detailed memorandum saying white candid -- can interpret it that way. brs gave us no citation -- the irs gave us no citation of the statutorily which or how it reached its decision-making. they did not even engage in the recent decision-making that it should. d decision-making that it should. in the public debate about these cases, the argument is often made, well, it would be absurd to condition tax credits on cooperation, because if it turns out states do not cooperate, look at the mess we are in. a couple of quick things to say about that. first, congress actually does that all the time. what is different here is that states called congress's bluff. we spent a lot of time working on the clean air act. the 36 states tomorrow said, we are not issuing state
implementation plans, the epa would have to issue all permits under the clean air act. the air pollution program under the clean air act would grind to a halt. the state of texas by itself conducts more investigations into a facility in a given year than the issue that -- that the epa nationwide. faced that never problem echo because 36 date have never done that. why? because there are incentives not to do so. the state face more stringent revelatory requirements if they do not comply with the clean air act, and they lose a lot of money. not simply money for their own programs, but money for highways. get taken away if states don't cooperate. medicated self -- medicaid itself, if states called the bluff, they would not meet the
needs of needy populations. thing to point out, though, is that the government in its briefing has not argued that the slang which is a mistake. and it has not read -- has not argumente absurd either. and the reason is, the doctrine is pretty clear. -- the document is pretty clear. the government would have to show it is not possible that congress could have drafted a statute that means what the language clearly says. and given that congress has done this sort of thing before, that is a burden the federal government knows it cannot meet. which is why if you read the brief, the federal government is not making those arguments, even know if you look on the blogs and in the magazines and so on, commentators are. is important to distinguish between the argument that may sound good in a soundbite versus those that actually have some legal import. there are some other arguments being made.
i can respond to questions if folks want to. one other one that is pointing to a law is that, when congress thought to revise portions of the formal care act through the reconciliation process, it added reporting requirements that are expressly repriced -- expressly required in both the 1311 exchanges and 1321 exchanges. the argument is that commerce would not have done this if subsidies were not available in both exchanges because some of the information that must be reported relates to subsidies. there are a couple of problems with this. one is, if you look at what congress did in reference to 1321, whenn 1311 and congress had its first ,pportunity to deal with this it saw the need to edit both state and federal changes separately, not to sweep them together under one simple heading.
the other thing that is important to note is that it is undisputed that not everyone who purchases insurance in an exchange gets tax credits and subsidies. there must be eligible the determination. and yet, state exchanges must fulfill these reporting requirements for all people purchasing insurance, in these exchanges, even those not getting subsidies. it's not true that there would be no reporting for folks who don't get subsidies, including the poorest of the working poor, who as the statute is written and no one has contested are ineligible for subsidies in any has toecause the statute have a ceiling for getting subsidies as well as a floor. furthermore, congress was able to enact all kinds of things in this statute under the assumption that it would not states woulde cooperate.
it wouldn't matter. it matters, because states decided not to walk rate. -- not to cooperate. where are we now? we have these two decisions. the d c circuit held that the statute unambiguously forecloses the irs's interpretation. and the court said, we have exchanges. weaving can see their under section 1311, because 1321 is the kovalev, but they are still not established by states. we will -- is the equivalent, but they are still not established by states. not support this. one established that it was ambiguous. one judge on the fourth circuit held that the statute directly supported the iressa's position. -- the irs's
position. only one in the sixth judges held that decision. if the statute is ambiguous and the court should defer to the in the future, it will revert to the statutory language. there is a petition for rehearing en banc in the d c circuit that was fired by the federal government on august 1. the response is due at the end of the week. thisdministration filed because it helps to eliminate is split and reduce the likelihood that the supreme court will review this decision. the d c circuit has been very stingy at granting en banc decisions. and historically have not considered the circuit court to in a position to grant en
banc decisions. the has to between not position in the past 10 or 15 years or so. file bys a petition to the plaintiff before the supreme court that could be enacted upon in the fall and could be the decision on why the bc court will take this -- the d.c. court will take this case en banc. i have probably gone on farther than michael wanted me to, so i will stop there. but i would like to wrap up by noting that jonathan and i have been at this for a while and we've been debating these issues. something --ly after doing this for a while, you start to notice that there is something really absurd about these debates. everyone knows what "established by the state" means. i know it means. you know what it means. the obama admin is trish knows
what it means. the judges know what it means. rules forigibility tax credits, the eligible you rules to find out who congress wanted to get those subsidies to, that is what the illegibility rules say, qualified taxpayers and rolled "through an exchange established by the state." in time -- in trying to establish the agility of the subsidies, the obama ministration look through everything except what congress wrote. they looked to see some ambiguity about what congress meant what it said you have to enroll through it exchanges that was by the state. but they keep running into brick walls. they keep running into brick walls, because remarkably, there is no inconsistency in the statute. and jonathan and i were surprised to reach that conclusion, like so many supporters of the law.
we supported this error with a drafting -- supported this law with a drafting error. and what is surprising is so many people are halting against it is getting a lot more attention. a lot of people are delving into the legislative history. and many are working their way to the same evidence and running into the same brick walls we did when we started researching this years ago. is the conclusion we reached actually disquieting. in 2011, the obama administration unilaterally decided to tax and borrow and spend billions of dollars. treasury and irs officials cited no authority for that decision, and they would later tell federal investigators they knew they did not have statutory authority to do this, but they did it anyway.
the impact of that decision has been in enormous. insurers have chosen to participate in the ppaca exchanges who otherwise would not have done so. employers have reconfigured their health insurance benefits, limiting jobs, reducing people's hours, people like teaching assistants and restaurant workers, to comply with a mandate from which they are by law exempt. millions of americans are either paying penalties or have purchased health insurance coverage to comply with an individual mandate from which they are by law exempt. nearly 5 million americans n exchangeenroll in a plan with subsidies that the obama administration had no authority to offer them. mentioned, that could be taken with the stroke of a pen. the federal debt rises above the andl authorized by law,
that imposes an unauthorized tax burden on not just current, but also future generations. the ministrations decision has also had sweeping impact on the political process. it has denied states and denied voters in those 36 states the use of a policy lever that congress granted them. she ability to veto the ppaca' subsidies, employer mandate, and to a larger extent, the individual mandate, in effect, this decision by the obama administration has disenfranchised voters in 36 states. had the administration follow changes would have led to changes in the ppaca and maybe even in congress. instead, it has altered the outcome of congressional votes to repeal the ppaca and likely altered the outcome of a rational elections.
it would have exposed the full cost to those enrolled in exchanges and lead to -- which would have led to a backlash against the law. the iressa still influencing congressional elections today by influencing the subsidies, because potential candidates are deciding whether or not to enter races in 2014 or 2016 as if that gaping hole did not exist, as if the lock congress enacted were more popular and successful than it actually is. on july 22, the second highest court in the nation ruled that the obama administration is violating the law, and not in a small way. with that, jonathan and i are happy to take whatever questions you have will stop thank you. -- whatever questions you have. thank you. [applause] >> we do have time for questions. yes?
you mentioned that the rs at any given time could issue new regulations for new guidance. say, 2016, there is a republican president, republican house, and republican senate, could they just issue new guidance for a new regulation? -- >> what they're supposed to do, not that executive agencies always do this, but they could issue a regulation saying that we no longer believe the proper interpretation of the statutory language is accurate. tax credit thoroughly available through a state establish exchange. and if the fort -- the fourth circuit ruling ends up becoming [indiscernible] they are perfectly free to change their interpretation. and the premise of that is, that is not auity
congressional failure to do something, but rather a delegation of authority to the agency and the agency just has to act within the bounds of that ambiguity. unless we were to get a supreme the statute saying unambiguously authorizes tax , adits and federal exchanges future administration could do that. >> yes? >> how easy would it be for states to kind of fix this problem if it is upheld kind of as it is and the state says, i do want all my constituents to lose these taxes tax -- how eass it for a stay to say, all right, i'm going to make a couple of switches that will allow the federal exchange to effectively serve as a state exchange? >> it depends on the state. states could create it exchanges. there is some question about whether or not they could still get the federal of subsidies that were initially provided for
state creation. and for some states, like in ohio, have enacted constitutional amendment that preclude the state from doing anything that forces someone to acquire health insurance. interpreted to apply to things like the employer or even the individual mandate, it seems like ohio would not be allowed to create an exchange without repealing that. because the creation of the exchange results in tax credits that trigger both the employer mandate and the individual mandate penalties. it depends on the state, how easy that would be. but certain states, politically, this would probably become a political issue in the states, just as medicaid expansion has been. in some states, it is want tolly popular to accept medicaid expansion, and in some states, it's popular to say no, we are not going to take it -- take the money.
healthcare.gov has proven a creating an exchange is difficult. a state that wants to create an exchange has to pass a law, generally. it has to appoint a board, come up with a funding mechanism for the exchanges. it has to make sure that these stages operate as they are supposed to operate. it is very difficult to do on its own, even if you have political support. and as jonathan mentioned, there's a lot of political opposition to states doing this. it has manifested itself in laws being passed preventing states from doing this sort of thing. and i think you have to add to the political calculus in each because oftually, the court ruling the way it did that if a state does not establish an exchange, they are exempt from the employer mandate.
they do not have to reduce their workers hours. they do not have to let people go. they do not have to purchase the the statecoverage if establish an exchange. employers could become a lobbying force against establishing exchanges in a way that they weren't when 36 states decided not to establish exchanges. >> i guess my question is, if it ends up being held up by the courts, what is the finding that has been released? do states have to repay it? do individuals have to repay it? i cannot see the iressa going after everyone you received a goingy and -- the irs after the one who received a subsidy and demanding it back. >> you cannot see me iressa with -- the irs being worthless like that. [laughter] if someone received a tax credit in excess of what they are entitled to, they have to pay it back. not all of it and not all the time. there are limits on what people would have to pay back. people could end up having to pay thousands of dollars.
what made the obama administration decision so reckless, not only are they taxing and borrowing and spending money they have no authority to touch, but they are using it to induce people to thatl and -- in exchanges those people could have to pay back the subsidy. those people could get hit with thousands of dollars more on their tax bill. the rs might have the authority not to collect that money. but that is an open question. it was reported in the new york times that because the federal government has not been verifying eligibility for the tax credit on these exchanges that somewhere up to 2 million --ple have not been able to that have received tax credits and subsidies may not be eligible. they have not been able to confirm that. will they actually follow through with that or not? i don't know.
but that is a problem that exists in part because eligibility has been hard to verify, and as i noted the way the law is written, there are some weird ink about eligibility. you can make too little to get help. but that is the way the law is written. it is very clear about that. the other thing about that is, the court could have some discretion about whether -- some equitable discretion in terms of mandated,es that are the legal question of whether or not the rs regulation is valid is separate from -- the irs regulation is valid is separate from whether or not it must be enacted. this is why resolution of the issue quickly is important. both the fourth circuit court and the d.c. court expedited their view in this case. they asked the supreme court to refuse any extension of time request from the federal government. decision in the d.c.
circuit delayed finalization this case because there are inll two cases pending indiana and oklahoma, and there could be others filed. letting people know what they are entitled to or not, leading states and -- leading states understand what the choices are we have and how we are going to make that choice, i would think issue resument the -- resolved finally by the supreme court as quickly as possible. i think the plaintiff's have a better chance. i think that's probably true. but i also think that certainty has a value of itself in this sort of question. and so it's important for us to know precisely how the law's going to operate. >> i think it's also worth mentioning, even if the i.r.s. or the courts decide people will not have to pay back the subsidies that they received,
that doesn't really resolve the injustice involved. that means the cost of those subsidies won't be borne by the individual who received the benefit of that insurance. it will be borne by, you know, that money will be added to the federal debt. we like to treat the federal debt as a great big piggy bank, but that is an implicit tax burden on future taxpayers. someone has to pay for it. there is no answer as to who that should be. which is why this decision was so reckless. >> after the 2012 supreme court hearing that upheld the individual mandate, there's been a lot of speculation that justice roberts would be doing something that significantly harm obamacare but in that case he said he is essentially defering to the law, saying if the legislators passed
something that's bad, it's not or job to strike it down only if it's unconstitutional. in this case, wouldn't the halbig decision be in line with that. because what you're basing it on is the clear statutory -- the letter of the law, that he might be willing to take the -- >> another recurring theme in the debate over these cases is ohn roberts will never vote to -- would never vote against obamacare in halbig. everyone in this town seems to read john roberts' mind. i am not qualified to do that. i think that he's been unpredictable when it comes to ruling on these cases. certainly his ruling in f.i.b. was unpredictable. in hobby lobby he voted against the obama administration. he's done so lots of time. often with the unanimous court. often not. i don't know -- i don't know
how he's going to rule. in nfib he said it's not the job of the court to protect the people from their policy choices. this is certainly a policy choice that congress made. a lot of people might not like it. the remedy is to fix it through the legislative process, not by executive fiat. you can certainly find support for the plaintiffs' case -- the halbig plaintiff's case in justice roberts' opinion in nfib. i should defer to the law professor on this one. >> as a general matter, when you're challenging the federal government in federal court you assume you're going to lose. it's like betting against the house in a casino. that said, things that don't -- things that make me think it would be a strong case before the supreme court, one, is if you look at the statutory interpretation question, if this were rising under any other statute, this would not be controversial. we see cases all the time where a single word results in a
program being invalidated. in a statute. let alone something that is systematically repeated and cross-referenced, etc. pundits are saying, oh, courts will never do. they actually do all the time. again, look at the brucks' e.p.a. record in the d.c. -- bush administration's e.p.a. record in the d.c. court. look at the supreme court's opinion in the last term where it said a clear statutory term like a number means what it says. pollutant, ok, precise counters of that might be open to some debate. but it's pretty clear. i think established by the state, especially when it's defined is more like 250 tons per year than it is like pollutants standing by itself. the other thing is this is a problem unlike a constitutional problem that can be resolved not by congress but by states. if the halbig plaintiffs win,
states now are in a position of saying, ok, are we going to subject more people to the individual mandate penalty, subject more people to the employer mandate, in return for these tax credits or are we not going to do that? and i would think that the current court would be very sympathetic with saying, that's the sort of choice that is appropriate to let states make. the fact that states might not make that choice the way congress did in 2010, the way congress might want now, the way folks might want now really shouldn't matter because not only can congress fix the statute but states really have a lot to say about how to ultimately -- how to ultimately it affects their citizens. >> hi. first of all, i'd like to thank both of you for the tremendous work you've put into this issue over the past several years. i'm struck by the same time, michael. every time i see articles by
these liberals, they addressed that in health affairs two years ago. i think you guys have been phenomenal on all aspects to this and could you oast to this. following up on these states' fights which i think will start in earnest next session. i don't think the liberals will wait for a court resolution. i think they'll start major pushes to protect people from the big bad conservatives on the supreme court and things of that nature. and they're going to parade through people who could potentially lose their tax credits and say do you want this person to suffer and so on. michael, i think you're right. we'll be able to fight by back with the employer mandate -- fight back by the employer mandate. in some number of states, the families u.s.a. model, which is pass a bill that, quote, establishes in exchange but immediately delegates all to the federal government, will pass. and i'd like your thoughts on the legality of subsidies flowing in that kind of a regime. we're oregonians already doing that so we could see a challenge sooner rather than
later. do you think that will pass muster if it's back to the federal government. >> give credit where it's due. thank you, first, for what you had to say about our work. our work appeared in "health mate ricks" which is the "journal of law medicine" -- >> do you suffer from insomnia, 75 pages. >> in fairness to us, it is a law journal. if we made it comprehensible it would have been rejected. [laughter] so the question is, will states be able to just pass a bill saying we established an exchange and kicked all our hard work to the federal government that already has a website and at least some parts of the payment system built in? the answer is that's going to be really tough because the statute is also clear that a state established exchange has the authority to contract only with a few specified agencies.
specified entities. those entities must be subject to the laws of the state. they have to be either a nonprofit that is not a health insurance company or the state medicaid agency. and the federal government does not fit those criteria. the state can't just pass a law that says we're establishing an exchange and the federal government's going to do it all, because under the statute if they do that the secretary doesn't have any discretion. they are not in compliance with the rules for estate-established -- state-established exchanges and establish an exchange for that state so that will be a federally established exchanges, not a state established exchange. we are talking about a post-halbig world where halbig is upheld. so there are legal obstacles. however, there were legal obstacles to offering subsidies through federal exchanges and they went ahead and did that.
so one thing they might try to do, it will be consistent with past practices, to go ahead and do that and issue subsidies in those states that do what you call a families u.s.a. approach and say catch us if you can. now, if halbig is upheld, then presumably an employer or individual in that state who would be subject -- who would face illegal penalties under the individual or employer mandates because of the subsidies that are being issued in that state with a noncompliant state established exchange, presumably they would be able to get relief from the courts. but it has taken years -- two ears now almost to reach the apellate court level in halbig and king and so forth and so that process could get dragged out. it just depends on how the obama administration wants to play that. if they want to try to get away with the same thing twice. >> a lot of it will depend on
state law. i mean, some states, clever lawyers might be able to find a way around at least some of the obstacles that michael identified. say your state medicaid agency is established in the exchange and then have it do it and then it subcontracts. the exchange has to be run by this but it doesn't say anything about subcontracts. there might be ways working around it. my own view is, if there are legal ways of working around those provisions, ok. then fine. the law is what congress enacted, not what they wish they had a 60th vote for, three years of hindsight they wish they enacted instead. and my first concern getting -- spending the time on this it's very important that when congress enacts something like this we actually stick what congress enacted. if we don't like it we change it through the proper process. and so there may be ways around it that are legal.
if there are, ok. >> any other questions? well, seeing none, before we wrap up, i think it should be acknowledged, the reason we're here today and the reason this issue is brought to the floor, the great research and scholarship that michael and jonathan did. if halbig is upheld, it will be a victory for the rule of law. you heard not only from two experts who clearly know their stuff very well, but will have paid a large part in that victory. thank you very much for coming. please join me in thanking these scholars. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2014]
>> you can watch more at c-span.org. more live coming up this afternoon with an look of an executive order of what president obama issued in 2012 providing temporary protection for the dreamers brought to the u.s. illegally by their parents. that brought to you by pew charitable trust is at 2:00 p.m. eastern. a look on c-span, a look at veterans' health care, an issue that's drawn a lot of attention from congress this year. we'll show you last week's veterans' health care bill signing with president obama along with highlights from are several congressional hearings on the issue. among those who testified, a woman whose son was denied treatment for severe mental illness and later committed suicide. here's a look.
>> brian was evaluated, he was diagnosed with ptsdi, t.b.i., depression and anxiety. at this time i'd like to you to refer to the documents that you received. brian's medical documents. it documents that brian could not remember the questions asked from the therapists during the interview. he had extensive back pain. he couldn't sleep. he felt profound guilt. he suffered from low self-esteem and as a result he was a risk for suicide. nonetheless, he was just immediately discharged and told to follow-up. how in the world you can ask someone who can't remember the questions asked to follow up with the v.a. is beyond me. brian deteriorated quickly from december, 2010, to may 27, 2011, when he took his life. he couldn't stand how he would be angry, depressed, anxious. he didn't know how to cope. it took a toll on his
relationships. if the d.o.d. and v.a. assessed brian for suicide risk, it was their duty to treat him, but he received nothing. he applied for disability but was unable to wait. >> and our focus on veterans' issues tonight in "primetime" beginning at 8:00 p.m. eastern here on c-span. members of congress are sending updates on twitter during their five-week summer recess. speaking of iraq congresswoman and congresswoman duckworth saying --
>> both the house and senate return for legislative work on september 8. representative bon ki-moon at the united nations. he answered questions about iraq's new prime. the ebola outbreak in west africa and the israeli-palestinian conflict. this is about 20 minutes. >> good afternoon. the secretary general is here. he'll make a few remarks. we'll have time for about three or four questions. so there will be more disappointed people than happy ones. but i leave it to the secretary general. >> good afternoon, everyone. it's a great pleasure to be here. it's about about two weeks since i saw you last. he war continues to experience turmoil and several crises are occurring at the same time.
i'd like to say a few words about three of the emergencies. first, the situation in iraq. during my visit to baghdad last month, i urged iraqis to support the democratic process. a movement toward the formation of new government, the prime minister designate now has the important task of forming a something that's acceptable to all components of iraqi society. it is imperative that the security forces refrain from intervening in the political process. the people of iraq and all of need security. yet, a poison of hatred and brutality is spreading. the so-called islamic state,
isis, is a threat to iraq, syria and the region. i'm profoundly dismayed by the barbaric act, including executions, boys forcibly taken from their homes to fight, girls abducted or trafficked as sex slaves. is plight of others especially harrowing. u.n. humanitarian personnel are in the area doing all we can. airdrops of food and water are reaching some of the trapped people. but the situation on the mountain is dire. and even when people manage to ind a way out, they remain exposed to heat and perilous all the same.
i urge the intelligence community to do even more to provide the protection they need. and i condemn in the strongest possible terms the systemic persecution of individuals from minority populations and those who refuse the extremist deology of isis and also other groups. let me now turn to the situation in gaza. the most recent cease-fire brokered by egypt appears to be holding. but that is not enough. i strongly hope that a durable cease-fire will be reached soon. we must use the cessation of hostilities to address urgent humanitarian needs. the toll of death and destruction is staggering. according to preliminary information, nearly 2,000 palestinians have been killed, lmost 75% of them civilians,
ncluding 459 children. there were more children killed in this gaza conflict than in the previous two crisis combined. are han 300,000 people still sheltered in schools, government and private schools and other public facilities, all with a host of families. at least 100,000 people had their homes destroyed or severely damaged. most of gaza's households have little or no water supply. hospitals meant to cope with the disaster are themselves isaster zones. a great many of the buildings will not be ready or totally
unuseable in their current state. the united nations will work with regional and international actors to rebuild, but unless we address the underlying causes of the conflict, another round of violence and vengeance is almost guaranteed. israel's duty to protect its citizens from rocket attacks by hamas and other threats is beyond the question. at the same time, the fighting has raised a series of questions about israel's espect for the principles of proportionality. reports of military activity does not justify jeopardizing the lives and safety of many thousands of innocent civilians. i have called for an investigation into the repeated shelling of u.n. facilities harboring civilians. i expect accountability for the
nocent lives lost and damage incurred. ladies and gentlemen, finally, the ebola outbreak in west frica which the world health organization has declared a public health emergency of international concern. w.h.o. announced today that the eath toll has surpassed 1,000. these steps are pearblely urgent. first, -- three steps especially urgent. first, addressing the lack of capacity in the most severely affected countries, guinea, liberia, sierra leon have only recently returned to political stability following years of conflict that destroyed or disabled their health systems.
i urge the international community to respond urgently to the shortage of doctors, nurses, including protective clothing and isolation tents. we need all hands ondeck. second, coordinated international response is essential. i remain in close touch with the director general of w.h.o.. in the days ahead, the u.n. system will further strengthen the way we are dealing with the outbreak. to that end, in close coordination with dr. margaret chen of w.h.o., i have designated dr. david navaro as senior coordinator for ebola viral disease. dr. navarro will be responsible
for ensuring that the united nations system makes an effective and coordinated contribution to the global effort to control the outbreak of ebola. third, we need to avoid a panic and fear. ebola can be prevented we resources, knowledge, action and will, people can survive the disease. ebola has been successfully brought under control elsewhere, and we can do it here too. and i thank you very much for your attention. >> thank you, mr. secretary general. thank you for your briefing. i am part of turkish radio and during your first term you told us you would try to be the
voice of the voiceless. but the recent -- you know, from what i hear from my own country, turkey, from what i hear from my colleagues in gaza and elsewhere, that they say that the u.n. has been ineffective dealing with the crisis in the middle east. what would you like to tell them? thank you. effectiveness of the united nations or international community as a whole, it's the lack of will of the concern. they have not been listening to the voices of interthe international community. and concerns raised by myself as the secretary general and many world leaders in the region and around the world. they simply have not listened to those voices of reason, and they have not heard their own
people. in the name of protecting their own people, their people have been killed by others. instead of what they have to do, and therefore this is almost the last chance for them. we have a very limited time. the 72-hour humanitarian cease-fire will end sometime tomorrow. o without losing any time, they have to agree to a more durable and sustainable cease-fire. then i think we are ready, as i said, we are ready to build. as i said, it's not guaranteed whether they will be able to agree by tomorrow. then, are they going to resume their fighting? the international community is ing to have a conference
again on the emergency basis, that we are going to rebuild. will they destroy it again? i said last wednesday in the general assembly, we have been building and they have been destroying and we have been building, destroying, building, destroying, i thought this should be the last chance. >> thank you, secretary general. on ukraine, there have been some attempts by russia to get a humanitarian into the conflict zone into eastern ukraine. there have been some problems but they are working with the red cross. would you welcome such convoys? do you think they're needed in this situation? thank you. >> i welcome the delivery of humanitarian assistance to communities in need. this should be done with the
agreement between or among the parties concerned and on under the you a pisses of the international community of the red cross. we are discussing this matter with concerned parties. >> thank you. >> thank you, mr. secretary general. ou mentioned the islamic state militant group, which now controls a large swath of both syria and iraq. what do you believe should be done to restore the full sovereignty of both countries and to prevent the islamic state group from carrying out its goal of establishing an islamic caliphate? >> first of all, if you look at
the root causes of this extremist or terrorist group penetrating into society, it's the lack of inclusiveness with all the groups of the people. religious or sectarian, whatever it may be, the leaders hould have always embraced and resolve all the differences of opinions among or between ectarian or religious groups in an inclusive way, mutually inclusive way. this has not happened in many iran. including that's why they have been allowing the breeding ground of these elements to take root.
so now i really appreciate some countries like the united states and some european countries who have been really trying to help iraqi government and kurdish regional government to prevent further spread of this. the international community should act together. first of all, promote mutual nderstanding among and between different, different groups of people, ethically or religiously. and they tried to listen very carefully and sincerely to the voices of the people. now that the largest swath of this territory has been occupied or protected by isis, we are very much concerned. at the same time, it's only the
people, hundreds of thousands of people, they are suffering because of the fear and threat and also humanitarian -- very dire humanitarian situation. we have very limited capacity at this time because of a very serious concern. i hope that the international community should do all what we an first bringing out, allowing the trapped people in the mountain area. i hope those countries who have capacity to do all what can allow these people to be rescued as soon as possible. >> thank you. last question. >> thank you, mr. secretary general. the president of iraq has already selected the doctor to form the next iraqi government.
what words would you have to the ex-prime minister, nouri maliki? and secondly, on gaza, there is a human rights council efforts to investigate what happened in gaza. would you recommend the security council members to take into consideration the result of such inquiries, sir? thank you. >> first of all, as i said ready yesterday, i commend e iraqi president for having nominated doctor in accordance with the iraqi constitution new the formation of a government. to form a government acceptable to all components of iraqi society in accordance with the
constitutional time frame. i'm concerned that the eightened political tensions the security threat of the islamic state could lead the country into even deeper crisis. i strongly urge all political parties and their supporters to remain calm and respect the political process governed by the constitution. the people of iraq deserve to live in a safe and prosperous and secure society. this is what the united nations and our team in iraq is doing in close consultation with member states. about the security council taking up this issue about the violation of human rights, i understand that there is some
consultation among and between the members of the security council about the possibility of taking up this issue. let us see how the negotiation is going on in cairo. at the same time it will be important for the security uncil when they agree on a cease-fire and durable cease-fire, then the situation will be strongly supported, endorsed by the security council. as they did in 2009 when they adopted resolution 1860 which has provided very broad and comprehensive framework of parties to maintain the sustainability of the cease-fire and also parties in the region and international
community to help this process be sustainable. > thank you very much. >> in about half an hour, the executive order that provides temporary protection from deportation for child immigrants, known as the dreamers, brought to the u.s. illegally by their parents. that event is hosted by the pew charitable trust. it's coming up at 2:00 p.m. eastern live here on c-span. on that issue, the group interamerica dialogue, looked why thousands of central american immigrants are coming to the united states. panelists discussed the role of crime, poverty and other issues, driving the imgrabts to the u.s. here's a portion of that until we wait for live coverage coming up from pew at 2:00 p.m. eastern. >> thank you very much for attending this meeting. many of you probably have participated in some other
gatherings relating to the subject of the immigration crisis. lots of terms have been used. e surge, the crisis, the byproduct of the development of violence, etc. and to some extent, this is sically about a -- a byproduct we have been warning for six years. that is governments in central america are not taking migration seriously. for those of you who have attended our meetings on migration and development, we have been warning about the need to take this trend of migration more seriously because there will be serious implications for people in the short term and this is the example of the implication. the current debate, paying attention to the border crisis as if that is the main issue.
when you take a closer look, the main issue is not simply of holding facilities and carrying the number of apprehended children and adults, but it's more about the migration trend that has been going on for the past five to seven years relating to a number of individuals, adults and minors who have been leaving the region as a byproduct of the conflict going on in the region, particularly the continued growth of homicides in central america, the violence that's taking place. you know, for -- it is troublesome to me that while here there is a focus in washington of the debate about this surge, in none of the central american countries -- and with all due respect to government officials and diplomats from the region -- there is calling the president
to ask them, how come they were not aware or if they were aware, they allowed to at least have 10 to 20 minors leaving their countries every day for the past five years? this is a fact that was -- which many government officials were aware. we work directly with different political officials in central america dealing with migration, migration and development issues and they were aware there were problems. but for the most part, countries like guatemala, for example, had a minor campaign of the dangers of migrating, a campaign that they invested less than a million dollars for two years to tell you, just be careful, take water just in case. while it -- in a way, there is a trivialization of the problem in the region that amounted to this crisis today. he crisis is not about the
upsurge because you cannot argue basically that you have -- that 50,000 people represent a crisis as opposed to 30,000 or 10,000 minors. who defines the threshold of what constitutes a crisis? but i think the problem is that there is significant neglect in central america about what is happening. there are five points i'd like to conclude with before i talk about the resource of the survey. i'll deal with the study itself because you have the report with you. i want to point out the five main -- six main issues. the first one is that, yes, violence is the common denominator that comes across as a byproduct of the migration flow of adults and minors going on. it's more pronounced among adults than minors with the xceptions of honor -- honduras where you see 70% of homicides -- excuse me -- of where kids
are coming from is where all homicides are taking place. what it reflects is a different source. not just drug trafficking networks but also active underground economy operating at the level of extortion, kidnapping, political harassment of different sorts, groups that include groupings of five people in a neighborhood to networks of youth gang members in some cases. the widespread aspect of that has led to a situation of security but a situation of fear that is quite widespread. it's that situation of fear that has pushed people to move out. i'll explain why that's the case.
second is that it's an important fact to keep in mind that poverty is not a driver of migration. but there are issues of development that are causing people moving out. the work we did basically, we mapped out all of the municipalities in the united states where my grants come from because we have been collecting data on the flows of remittances and where my grants sent money to to basically map out the entire region of every single point where people are coming from. and we were able to prot that to where unaccompanied minors come from as well as violence is taking place uses homicides as a proxy as well as the local human development as the indicator at the municipal level. we looked at school enrollment rates too. and basically when it comes to human development, there is no
correlation in most cases with the exception of el salvador. but the reason is that central america is at the mediocre level of human development. it's right in the level in terms of the indicators. but what does it mean? does it mean that it's doing well? actually no, because using the indicators, you have six years of schooling against 14 of the high human development industries, basically the benchmark of your measure in terms of being competitive in the global economy. so there is a problem of development that is not clearly reflective in the indicators that are typically used. income itself is not enough of an indicator. but the reality is you cannot live on $300 on average when 2/3 of the population actually lives in less than $200. the third point is that there is no question about the fact that migration is connected to labor market in the united
states. there is a demand for foreign labor. transnational networks very well established between the united states and central american countries where you know where labor opportunities exist. if you are in the washington area, for example, you know that the selva doran community is from eastern salvador and they have very strong ties and you get information about the migratory flows. so it cannot be disregarded. who are the people who are migrating? you have people from different ranges of occupations but they are mostly coming to work in the typical industries -- construction, domestic work. some agricultural and the hospitality industry in general. so the fifth point is basically, so we know there are problems with insecurity, fear and violence. on the one hand there is a problem of development that impacted beyond the
basic indicators and there is migration with labor market demands in the united states, then we need to have an pproach to development that -- that pays attention to the labor sector as to other production factors like capital or agriculture. the agriculture in central america is obsolete at this point in time. we need to pay attention to an asset-building approach that basically deals with the labor force that is unskilled, informal, uneducated and unpaid. that is one -- underpaid. there are different ways to do that. and we have learned a lot of lessons in development to tackle that. the problem is that central america has not -- that has not been the case for many years. and finally, it's important to integrate my grants into the
desslution, into the strategies for development. there are ways to integrate them. we have talked to -- about that previously. so let me tell you a little bit about the research in five i mentioned before, wetory ang late that -- we've -- we triang late -- we've been following this trend for five years. you work with migration, and as you work with migration you learn where people are coming from, where money is being sent, the differences in volumes and the situations from which money has been sent. five years ago we noticed there was a flow of children leaving central america. for example, those of you who are familiar with one, they produced a study, a very important study in 2009 that tell of the experiences of this
plight. and even hollywood, you don't have to go very far. hollywood had a movie called "sin nobre." a honor duran kid. honduran kid. suddenly there is a cry sifments the research basically looks at the mapping of all the locations where my grants are coming from. and we plotted against certain indicators, including homicides as a proxy for violence. we did not include extortion. we did not include kidnapping, which is happening at every level in the three countries. we also did a nationwide household survey in el salvador last month where we tried to understand a couple of things. one is if anybody in the average, if people knew someone migrated and how, if they --
they interviewed persons that planned to migrate and why, what is the main problems of the country. at the same time, because of the anti-immigrant backlash saying immigrants were basically opportunityists, looking to exploit some -- opportunists, looking to exploit some flaw in the law and that they heard there were permissions being given to kids crossing the border, so we did a survey in the washington area interviewing 215 people to get a sense where did they say were the issues coming across. so with regard to the first part, we definitely find that violence in statistical terms, looking at nearly 900 municipalities in the three countries, it's basically positively correlated to the migration of adults as well as unaccompanied minors.
in honduras, the statistical relationship is the strongest. when it comes to development, as i mentioned before, only in el salvador it negatively correlated. that is the lower the level of development, the highest level of migration was going to take place. now, in a country like guatemala, circumstances were different. and that -- asked a number of questions as to why guatemala is different. but then there is a strong correlation of migration of adults. whenever there is migration of adults taking place, it correlates with the migration of minors for the case of guatemala, in particular. in honduras, the most powerful predictor is violence alone. in fact, not even the location where immigrants come from necessarily correlates at all times. el then we reach out to salvadorans. there are different circumstances. in some ways it's somewhat in
the middle. historically a more violent country than honduras but slightly than guatemala. it's a country that had an economic growth experience in some ways better than honduras but not as good as that of guatemala. it's a country that faces problems of income inequality in relative terms, similar to other countries like nicaragua with a but it's not as equal as guatemala or honduras. so we're trying to get a sense of that. it's a country that has a dense network at the transnational level between the united states and el salvador. basically 60% of people know someone in the united states, and the last -- people who migrated left without papers crossing the border. we actually have estimated the outflow of adults that left in
the past five years to get a sense. i can explain how we have done that. the second result that we found say t 25% of salvadorans they would rather live in salvador than stay and the primary reason was crime. the e take a look at percent of salvadorans who say who will migrate but those who say that crime is the main problem, not that they say they were leaving for the problem of insecurity but overall they found crime to be a major problem. it's also higher among those who wanted to migrate than those who did not want to migrate. 25% is a critical mass. in may of this year, the central bank of el salvador had released a report of
remittances and i don't think they thought carefully about the writing they put in it because they say remittances will continue to follow. look, 50% of salvadorans want to leave the country. [laughter] and of course it was an intentional -- not lapse of -- but it was a mistake, i guess, coming from a government institution. but the numbers basically have been there telling you people want to leave. in 2009, at that time it was 15%, the number of central americans who wanted to leave. now, it was alarming at that time, and no one paid attention to this issue. and then we looked at the immigrants here and we tried to make sense. you know, do you know someone? half of immigrants knew someone that had come in the past nine months to the united states crossing the border without papers. there was an
unaccompanied minor. we interviewed independently as a case study -- unaccompanied minors as well as immigrants to get a full sense of the story. issues that had to deal, for example, with the economy. but when you ask them, you know, why do you think -- we left an open-ended question. the answer was insecurity in our countries. nly 3% say something about the permiso. whichever way you want to look at this issue, the problem comes again, knocking to the door with insecurity in central america as well as with development. and development, because the reality of insecurity is nothing but the presence of an underground economy operating along the lines of criminal networks that find the
operating costs of working in the criminal sector as a profitable one. therefore, the economies are competing against the -- not just informal economy but the informal and criminal economies. so within this context, while the approach continues to be seen only as a security one, it's important to go back to the development issue. 15 years ago -- i mean, when i came, i came to manage a project central america 2020. we provided a blueprint for economic growth for central america, regional development in these countries and it was unfortunately practically ignored. invalid. is still a colleague who wrote the report on the security at that
time 15 years ago was already telling this is a real deal. you cannot ignore it. so with that in light, if it's human labor, if this labor, the one migrating, the development strategy needs to pay attention to labor. the increasing skills of the labor force, investment in the local markets as well as increasing education strategies through school retention. mean, these are very basic elements, but they cannot be disregarded and especially cannot be disregarded when the facts are right in your face and when the administration basically asks for less than 10% of his request to work with central america alone. you cannot address the problems of these unaccompanied minors without tackling the challenge of development in the region.
>> thank you. thank you very much. christina. >> ok. so -- well, first of all, i want to thank the inter-american dialogue for having me here today. it's a pleasure. and my name is christina garcia. i'm with the national alliance of latin american and caribbean communities. it's an umbrella-like organization in which we have about 40 to 50 members across the united states as well as partners and allies in latin america. specifically in central america and in mexico. and so we were asked to come today to sort of, you know, just kind of give our diagnostic in terms of how we see the issue from the mige rants' perspective on the ground and what has nalacc, what we're recommending in terms of proposed solutions or recommendations. first off, i want to start off
by giving a face of the stories of the children who are coming, who are they. we have one of our members in boston who has sort of been working with a lot of these families, specifically from honduras, children coming from honduras and she's seeing about five families per week just this whole last couple of few weeks actually. they are reporting that, you know, they are definitely sort of -- a lot of them are enduring trauma right now. they, you know, were just kind of really afraid. they're not even wanting to speak up in terms of what's happening to them. you know, their trust levels are very level. margarita is a small business owner. she owned a small warehouse that sells goods. she wasn't -- she specifically mentioned she was not fleeing because of poverty. her family was ok, you know, they were making ends meet. they were receiving threats that they were going to kill
their 5-year-old son. one day they came to their business and they -- someone left a note that they -- if they didn't pay them sort of -- their business was robbed several times but if they didn't get more money from them they were going to kill their son. then there was margarita and that's one of the ladies that -- the organization in boston is working with. then, there's the story of another. four sisters whose father had been paying like a gang tax for protection in the village in which they lived. the father was killed when he decided he just couldn't pay the tax anymore. they all came to the united states. they were all processed and given ankle brace lets and currently they have court dates -- bracelets and currently they have court dates to go before a judge in january. to sort of give a face to what these families are going through and who they are. just want to kind of comment a little bit on what manuel said. you know, he called this a
crises and obviously the data has been recorded and, you know, we see this as a -- crisis is something that there is a decisive moment, a turning point for the better of the worse. by definition that is a crisis. this is something that could have been prevented. this is something that we saw coming, and so this is a pattern that nalacc has been sort of tracking as well over the years. so besides that, there's not one explanation as to why the children are coming. it's a multifaceted, very complex situation. in part, the messaging that sort of predominant in the airwaves has been one of hate, one of, you know, kind of harsh, very harsh positioning from the administration and unfortunately as well as from -- both parties, republicans and democrats sort of, you know, one for one reason, one for the other. they -- a lot what we see is this huge spike of children are
not only coming to the united states as opposed to what sort of the media will have you believe. the united nations high commissioner for refugees recorded that there was a spike in 435% of asylum applications in mexico, panama, nicaragua with a, costa rica and belize from individuals from these three countries and this is between 2008 and 2013. right around the time that we see the record number of children sort of, you know, coming from the same region. so that was another sort of big red flag that we could have been doing something about it. most of the children cite fear of return as a number one reason. and so we're very concerned in approximate terms of how it's being dealt with locally. i wrote a little piece about mexico, but i'm not going to go over it because i don't want to go over my time.
mexican children are sort of being omitted from discourse, and so -- in many ways mexico is another country that is sort of plagued by violence, specifically along the border. i said i wasn't going to talk about mexico. i'll leave it there. and so i want to get into the why -- the why and the what. the why -- the recent triggers of why children are fleeing? i won't, you know, go into it too much, but besides violence and highest rates in homicides, right, that manuel just talked about, we also see the militarization, the approach that is sort of being taken in central america as well as within our -- on our borders as another sort of -- sort of reason that, you know, this is fostering this insecurity instead of sort of, you know, kind of really working on internal development. another factor would be a broken and outdated u.s.
immigration system that as was pointed out earlier, a lot of these families -- a lot of these children have families here already. we are working closely with heartland alliance and they report that 80% of children already have a blood relative here in the united states, so there's a strong migratory relationship between central america and the without acknowledging that. there are strong family ties already here. it is only natural that a child would want to be reunited with their mother or father. there is no policy reform in the immigration system, in the last 20 years, and that is exacerbating this issue. from a perspective, we see long-standing structural causes.